- Boxed, the online seller of bulk-sized toilet paper, cereal and other goods, is acquiring MaxDelivery, an on-demand grocery delivery company serving New York City, per a press release on Monday. Financial terms of the deal, which is expected to close in December, were not disclosed.
- The acquisition allows Boxed to expand into dark-store fulfillment and rapid on-demand delivery of fresh groceries, with plans to scale same-day grocery service across additional, unnamed markets.
- As part of the acquisition, Chris Siragusa, founder, president and chief technology officer of MaxDelivery, will become senior vice president of operations at Boxed.
Boxed has made its name as a hip seller of bulk goods online that also offers homegrown technology services. Now, it's moving into the same-day service and fresh-focused assortment that so many consumers have come to rely on during the pandemic.
MaxDelivery brands itself as a delivery "gourmet" supermarket that gets fresh foods, artisan wines and organic and local products, along with drugstore and household items, to customers within an hour. Founded in 2004, the company has operated in the shadow of FreshDirect, which Ahold Delhaize acquired alongside Centerbridge Partners earlier this year. But Boxed sees an opportunity to take the firm's expertise in dark-store fulfillment, add in its own software to optimize operations and scale the model to additional markets.
"Boxed customers have expressed how they value fresh groceries and we are excited to be able to deliver a more comprehensive product offering while benefiting from a complimentary business model with similarly high average order values as Boxed," Boxed co-founder and CEO Chieh Huang said in a statement. "In the months after closing, we plan to implement MaxDelivery’s model into several additional regions as we generate value for the entire Boxed ecosystem. We believe that MaxDelivery will also benefit from the use of Boxed software technology as it becomes a client of our Software business.”
With this, Boxed is following other online-only grocers like Farmstead in offering same-day delivery on a wide assortment of groceries. But it will have to contend with brick-and-mortar grocers that have expanded their services recently and are also moving into dark store fulfillment.
In the release, Boxed highlighted MaxDelivery's ability to compete with ultrafast delivery firms, which could indicate the companies intend to expand in the same population-dense cities that Getir, Buyk, 1520 and others are targeting.
MaxDelivery's workforce is made up of full-time, W-2 employees, helping the company maintain customer loyalty, with roughly 98% of orders coming from repeat customers yearly, per the announcement.
To date, MaxDelivery has completed more than 2 million deliveries and maintains an average order value of around $100, the announcement said.
Boxed has adjusted its business during the pandemic, ramping up its consumer-focused business as B2B sales declined. The company has also worked to boost shopper baskets by connecting to third-party sellers through an online marketplace, started selling digital advertising on its site recently and sped up order fulfillment.
Boxed is set to become a publicly traded company this quarter after announcing in June it entered into an agreement to combine with special purpose acquisition company Seven Oaks Acquisition Corp. The combined company will be called Boxed, Inc. and its common stock is expected to list on the New York Stock Exchange under the new ticker symbol “BOXD."